- The Washington Times - Wednesday, April 15, 2009

NEW YORK (AP) - Uneasy investors had only a modest appetite for stocks Wednesday after getting more evidence that the economy is still struggling.

Consumer staples rose in the early going as money flowed to safe-haven investments but technology issues lagged following Intel Corp.’s decision not to provide detailed forecasts for future quarters.

Government data provided further signs of a slowing economy. The Federal Reserve said production at the nation’s factories, mines and utilities fell 1.5 percent in March, the fifth straight month of decline and worse than the 1 percent dip analysts expected.

Separately the Labor Department reported consumer prices fell 0.1 percent last month as a drop in energy prices offset the biggest rise in tobacco prices in more than a decade. It was a better performance than the 0.1 percent rise economists had expected but still reflected weaker business activity.

The data combined with the cautious outlook from Intel and other companies are fanning worries in the market that a five-week rally in stocks from early March might have been overdone.

“We’re going to continue to get bad news,” said David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind. Hefty noted though, that investors are less swayed right now by fundamentals in the economy and more by the momentum of the market.

Stocks fluctuated in late morning trading. The Dow Jones industrial average rose 4.22, or 0.1 percent, to 7,924.40.

Broader stock indicators fell. The Standard & Poor’s 500 index fell 3.25, or 0.4 percent, to 838.25, and the Nasdaq, reflecting disappointment about Intel’s report, fell 21.15, or 1.3 percent, to 1,604.57.

Intel fell 67 cents, or 4.2 percent, to $15.34.

In a sign of further weakness in the economy, Yahoo Inc. and European bank UBS AG both are cutting jobs.

Yahoo is planning to cut several hundred jobs in its third round of layoffs in 14 months, a person familiar with the plans said. Details of the cuts are unlikely to be released before the company announces first-quarter results next Tuesday. Yahoo slipped 16 cents to $13.91.

Switzerland-based UBS said it will cut 8,700 jobs worldwide by the end of next year. UBS announced the cuts as it said it expects a first-quarter loss of nearly $1.75 billion. UBS fell 43 cents, or 3.8 percent, to $10.76.

The UBS results put a damper on improving bank earnings that were seen at Wells Fargo & Co. and Goldman Sachs Group Inc. Both Citigroup Inc. and Bank of America Corp., among the hardest hit by the credit crisis, report first-quarter results within the next week.

Investors will get further clues about economic conditions Wednesday when the Federal Reserve releases its report on regional economic conditions.

David Kelly, chief market strategist at JPMorgan Funds, said the mixed economic readings are to be expected and that it could take months for investors to get a better sense of whether the economy has managed to halt its fall.

“It’s like April weather,” he said. “Some days it will seem an awful lot like winter and other days it will feel like spring.”

In other market moves, the Russell 2000 index of smaller companies rose 0.37, or 0.1 percent, to 453.59.

Advancing issues outnumbered decliners by about 9 to 5 on the New York Stock Exchange, where volume came to 307.2 million shares.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.77 percent from 2.79 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Overseas, Japan’s Nikkei stock average fell 1.1 percent. In afternoon trading, Britain’s FTSE 100 fell 0.9 percent, Germany’s DAX index declined 0.4 percent, and France’s CAC-40 fell 0.8 percent.

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